Markets & Finance

European Indexes End Mostly Lower

The FTSE 100 closed in the red, weighed down by mining and oil stocks. Wall Street was higher on news that Abu Dhabi was buying a 4.9% stake in Citigroup. The German Ifo data was stronger than expected. WTI fell to US$95.00 a barrel focus shifted to the OPEC meeting next week. Copper was lower due to economic worries. In company updates, BARCLAYS (+5.43%) said that 2007 EPS will be in line with market expectations of 4% growth, adding that fiscal pretax profit is expected to be £7.1 billion. SEVERN TRENT (+3.08%) unveiled a 6.4% fall in first half pretax profit, hit by the summer floods in western England. Also, the US FDA reportedly said that GLAXO (-0.73%) sent misleading letters to health professionals touting its breast cancer drug Tykerb. In the wider market, WS ATKINS (+3.00%) posted a forecast-beating 46% rise in first half pretax profit. GREENCORE (-1.56%) reported a 1.63% fall in fiscal adjusted EPS, adding that it was working to offset the impact of high levels of raw material inflation. DE LA RUE (+8.83%) posted first half pretax profit of £53.8 million, a rise of 22.6%, saying that it is to start a strategic review. TOPPS TILES (-9.88%) said that in the first seven weeks of the new financial period total revenue was up 8.4% and like-for-like revenue rose 1.1%.

Paris

The CAC 40 (-0.44%) pared earlier losses but closed the session in negative territory, dragged down by ARCELOR MITTAL (-2.98%) and PPR (-3.99%). Meanwhile, Wall Street trades in positive territory. Of local note, Arcelor fell as Goldman Sachs downgraded peer ThyssenKrupp to neutral. Goldman believes that sustained high European carbon steel prices are likely to attract sufficient imports leading to spot price falls through 2008. PPR dived as French watchdog AMF asked PPR and CLARINS (-3.52%) to explain whether the companies are in talks after increases in Clarins shares, Le Figaro reported. Also, Credit Suisse downgraded PPR to neutral. SAINT GOBAIN (-2.33%) plans to invest €120 million in a float glass line project in Egypt. CARREFOUR (-0.79%) fell as French antitrust officials are seeking a fine of €31.5 million from Carrefour and Lego for fixing toy prices, Les Echos said. On the upside, BNP PARIBAS (+1.83%), SOCGEN (+1.96%), CREDIT AGRICOLE (+1.75%) and DEXIA (+1.47%) bucked the trend on news Dubai will buy a c.5% stake in Citigroup. AXA (+2.70%) also gained as Credit Suisse upgraded to outperform from neutral. Elsewhere, REMY COINTREAU (-0.27%) posted first half net profit of €38.1 million, slightly above consensus estimates.

Frankfurt

Xetra-Dax (-0.48%) regained some ground but still closed lower as US equity markets traded higher after news that the Abu Dhabi Investment Authority has acquired 4.9% of Citigroup. In Germany, the November Ifo reading beat forecasts, coming in at 104.2 after 103.9 in October. Stocks-wise, banks bucked the negative trend, recovering somewhat from recent losses as valuations have sunk to low levels: DEUTSCHE BANK (+1.5%); COMMERZBANK (+2.54%). In the European airline sector, and of interest to the likes of LUFTHANSA (-0.11%), a consortium led by TPG and BA abandoned its bid for Iberia. In other news, sales of winter tires in Germany are down year-over-year, according to Handelsblatt. CONTINENTAL (-1.24%), meanwhile, said it expects very good winter tyre earnings due to an improved product sales mix. SAP (-0.87%) head of Europe/Middle East/America said that the unit is on target to deliver a record quarter in fourth quarter07. Russian billionaire Oleg Deripaska has quit a tender to buy a 25% stake in turbine maker Power Machines in which SIEMENS (-0.38%) holds 25% plus one share. DRILLISCH (-0.16%) placed 17.4 million new shares, which generated proceeds of €106.4 million. PATRIZIA IMMOBILIEN (+1.20%) bought residential and commercial property for €200 million. Finally, IKB (-2.06%) was hit again as KfW Bankengruppe raised the risk provision by €2.3 billion to €4.8 billion.

Amsterdam

The AEX (+0.09%) closed just above the gain line with Wall Street trading higher following a US$7.5 billion investment in Citigroup from Abu Dhabi. WTI was down US$2.68 at US$95.02/bbl after a fall in US consumer confidence data indicated a slump in demand: ROYAL DUTCH SHELL (-0.84%). Back home, ARCELOR MITTAL (-2.94%) was a significant weight following a note from Goldman Sachs in which it raised its target on the steelmaker, but warned that rising inventories may put pressure on EU steel prices. Dutch staffing figures for week 41-44 of 2007 showed revenues up just 2% vs a 5% rise year-over-year - VEDIOR (+0.43%), RANDSTAD (-0.54%) and USG (-1.44%). Elsewhere, ASML (-1.45%) purchased some 5.45 million of its own shares at an average price of €22.53/share from 19-26 November. Bucking the trend, AEGON (+2.4%) was in the black on bullish guidance from its investor day yesterday. In broker news, ABN Amro upgraded SBM OFFSHORE (+0.56%) to buy from hold. Deutsche Bank cut its target on TNT (+1.02%) to €29, keeping a hold stance. In the wider market, BINCK (-4.87%) announced a €385 million 3-for-2 rights issue of 46.3 million new shares at an issue price of €8.32/new share to fund the acquisition of Alex. Potential buyers of IMTECH (-3.22%), which has rejected a €1.15 billion bid, have until 7 December to make a bid proposal and obtain access to due diligence.

Zurich

The SLI (+0.33%) ended as Europe's best performer on Tuesday thanks to solid pharma and financial stocks. Over in Germany, the Ifo business climate indicator came in at 104.2 for November, better than expected. US markets trade higher on news that the Abu Dhabi Investment Authority is taking a sizeable stake in Citigroup. This lifted the local banking sector as well: UBS (+3.08%), CREDIT SUISSE (+1.2%). Also supporting the rise in UBS and Credit Suisse were positive comments from analysts at Exane BNP-Paribas. The French broker initiated coverage on UBS with an outperform rating, as it expects that after a horrendous 2007, the Swiss banking giant will leverage its superior business mix and the restructuring of its IB division to rebound in 2008. Exane, meanwhile, started coverage on Credit Suisse with neutral as it thinks the bank should be able to emerge from the current turmoil with limited damage. In more banking initiations, Lehman initiated on JULIUS BAER (+0.23%) with equal weight and CHF95 price target, expecting support for the valuation from an upcoming divisional reorganisation and the possible sale of its US business. The weak dollar saw SWATCH (-1.99%) and RICHEMONT (-1.29%) trade lower.